KYOTO — Local foreign and Japanese private university teachers have formed a group to study an issue that affects nearly all foreigners working for Japanese employers — a pension system that pays out less the longer you work.
“Under the current system, you must work for a minimum of 20 to 25 years in order to qualify for a full pension. If you don’t stay the required length of time, you could lose a lot, if not most, of what you’ve paid into the system,” said Paul Jaffe, an American instructor at Ryukoku University and head of the group.
Japanese law stipulates that foreigners who work in the country for up to three years and pay into the pension system are entitled, upon leaving, to receive a one-time lump-sum payment equal to their average monthly salary times a certain figure. The figure, set by the Health and Welfare Ministry, ranges between 0.5 and 3, depending on the length of stay.
The problem, Jaffe said, is that those foreigners who work in Japan for more than three years but less than the required minimum will pay into the pension system but receive only three times their average monthly salary when they leave, which means they stand to lose much, if not most, of what they’ve paid in. “If foreigners need to return to their home country, for whatever reason, they may apply for this lump-sum payment within two years after they leave, or forfeit everything. In my case, I’ve been paying into the pension system since October 1990,” Jaffe said. “If, for whatever reason, I had returned to the U.S. at the end of June, I would have received only about 1.6 million yen, although I have paid nearly 6.8 million yen into the system.”
Many other foreign teachers are in the same boat. In July, Jaffe and his group carried out a nationwide survey via the Internet of foreign professors and their length of stay in Japan. Of the 140 responses received, only 25 had been paying into the pension system for less than three years.
Half of the respondents had been paying into the system for between six and 10 years. “The longer you stay, the more you may lose. If you’ve been working in Japan a long time and suddenly decide to leave, you can lose more than 50 percent of what you’ve paid in,” Jaffe said.
Once a teacher leaves Japan, Jaffe said, the person has up to two years to file a claim for the lump sum. Yet once the money is paid out, if the teacher decides to return to Japan, it’s back to square one. This period of time out of the system is known as “karakan,” or empty time.
Tom Robb, another group member who teaches at Kyoto Sangyo University, said the law should be revised, because many teachers often return to their home country for a few years and later come back to Japan. “Japanese professors or employees who reside abroad may count their time abroad as part of the 20 or 25 years needed to receive a full pension. Foreigners are not allowed to do so,” Robb said. The only exception, he added, is if the foreigner has permanent residency status in Japan, in which case the person can get some money for the time spent abroad.
Last November, Jaffe, along with several other foreign professors, held a forum on the pension issue with the ultimate goal of revising the law. “Last month, we submitted a report to the Health and Welfare Ministry, outlining some of the problems with the current pension system. Of particular concern is the fact that if a foreign professor leaves Japan to go overseas for a couple of years and then returns to Japan, that time abroad is not included in the time needed for a full pension, whereas with Japanese teachers, it can be,” said Shigeru Wakita, a labor law professor at Kyoto’s Ryukoku University and one of several Japanese professors and labor experts assisting Jaffe’s group.